5 Ways to Make Audit Faster and Easier
Updated: Aug 2, 2019
Arduous, dreaded, necessary --- three words that may best describe an audit. By definition, audit is simply the independent examination of an organization’s records to determine the accuracy of its financial statements. In reality, it is a painstaking process which may involve frantic search for documentation, lengthy meetings and long hours of digging for justification.
In this world where compliance and transparency are expected, the audit process is a must. There is simply no way around it. There are, however, ways to minimize the hassles it brings:
Establish a well-defined process for financial transactions with proper documentation. This is a prerequisite in any organization. Having a defined process for purchasing, reimbursing and other financial transactions, with identified approvers, and a way to add proof of execution, will not just make audit an easier process but will make the entire financial process a better one.
Implement data storage with effective filing system. Auditors usually ask for a specific type of data, filtered by certain factors or attributes (e.g. geography, product type, or by production plant). If you have the proper software and storage system, getting this data sorted in the way the auditor needs it will be a breeze. This minimizes the need to reconfigure data just to meet audit requirements.
Highlight exceptions Sometimes, exceptions cannot be avoided. Whether prompted by the unavailability of authorized approvers or connectivity issues preventing approvals through the usual online channel, there should be a way for exceptions to be recorded, stored and easily retrieved through your accounting system. More importantly, even before the audit starts, exceptions can be quickly investigated and addressed on a regular basis. These regular checkpoints give auditors the assurance that management is on top of the exceptions and is quickly addressing them.
Leverage software solutions to ensure that controls are in place and human error is minimized. This takes away a lot of the manual work associated with Accounting and Finance. It also makes it easier to track transactions and spot discrepancies. It also ensures that the proper accounting or financial process is always followed.
Maintain proper segregation of duties One thing that auditors look for is the proper segregation of duties from the requisitioning party, the approval process, receipt of goods/services and payment. This ensures that proper control and compliance are maintained. In small to medium companies, this can be hard to do given limited manpower. Technology can be utilized to ensure segregation while keeping additional workload to a minimum.
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